People v. Bergman

• Decision Date: 16 December 1976
• Citation: 389 N.Y.S.2d 589,55 A.D.2d 542
• Parties: The PEOPLE of the State of New York, Plaintiff-Respondent, v. Bernard BERGMAN, Defendant-Appellant, Ramsey Clark, Receiver-Respondent.
• Court: New York Supreme Court — Appellate Division

Page 589

389 N.Y.S.2d 589

55 A.D.2d 542

The PEOPLE of the State of New York, Plaintiff-Respondent, v. Bernard BERGMAN, Defendant-Appellant Ramsey Clark, Receiver-Respondent.

Supreme Court, Appellate Division, First Department.

Dec. 16, 1976.

P. Saqqal, New York City, for plaintiff-respondent.

L. R. Friedman, New York City, for defendant-appellant.

Before LUPIANO, J.P., and CAPOZZOLI, LANE, NUNEZ and LYNCH, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County, entered October 12, 1976, appointing a receiver pursuant to CPLR 5228(a), affirmed, and that respondent recover of appellant $40 costs and disbursements of this appeal.

Bernard Bergman had entered a plea of guilty in New York State Supreme Court of violation of Public Officers Law § 77, which plea was part of a larger agreement dispositive of indictments outstanding in both the State and Federal Courts.

The subject of the present appeal involves that portion of the agreement which resulted in a confession of judgment in favor of the State of New York for $2,500,000 plus interest. In furtherance of satisfaction of that judgment, Bergman and his wife jointly assigned all of their assets to the State Prosecutor and his nominee and promised to perform all acts necessary to effectuate the assignment.

The agreement also provided that the nominee of the Special Prosecutor (referred to throughout the agreement as the receiver) was authorized to sell those assets necessary to pay the indebtedness of $2,500,000 plus interest, as well as to be reimbursed for all costs incurred in connection with the assignment and receivership. The Bergmans retained a reversionary interest in the assigned assets which would remain unsold after satisfaction of the debt and payment of the ancillary costs.

The Special Prosecutor applied to the Court for the appointment of a receiver in order to marshal the assets and liquidate them in satisfaction of the money judgment, which motion was granted. We would affirm.

The property subject to assignment in this case, consisting primarily of shares of various closely held corporations and partnerships, appears in large part to be subject to various liens and encumbrances. Some assets listed appear to be chimerical in nature since they are presently effectively uncollectible or incapable of liquidation. This complex web of assets of uncertain liquid value would best be untangled by a receiver, acting solely to marshal and liquidate the assets, rather than by the Special Prosecutor, whose mandate is to investigate, ferret out, and prosecute miscreants of the nursing-home industry.

Furthermore, in view of the reversionary interest of the Bergmans in the assets remaining, it would be best that a receiver, appointed and supervised by the court, be responsible for the sale of the assets. The monitoring by the receiver and any experts utilized by him in the administration and sale of the property would be the best way to assure the maximum return of the moneys defrauded from the People of the State of New York.

The agreement provides that the costs of administration and sale are to be paid through these same assets. Since specialized properties are involved, one could reasonably contemplate the hiring of personnel familiar with the nursing-home industry--whether that hiring be done by the Special Prosecutor or by the receiver. It would be impractical and somewhat unreasonable to delegate those duties to another State bureau not specially designed to handle these matters. Even were such delegation made, it would inevitably result in hiring of an additional specialized staff to handle this matter, which staff would be paid for in any event from these same assets.

We have therefore concluded that, under all the circumstances of case, the appointment of a receiver was proper.

All concur, except CAPOZZOLI, J., who dissents in the following memorandum:

CAPOZZOLI, Justice (dissenting):

The result of the discussions between the defendant and the representatives of the State is that the defendant has confessed judgment in favor of the People of the State of New York for $2,500,000. Both the defendant and his wife also executed a general assignment whereby both assigned to the O.S.P. Nursing Home Restitution Fund and to any nominee selected by the Special Prosecutor, all their right, title and interest in all of their property as of September 14th, 1976, or which would thereafter be acquired by them. It would seem that the Special Prosecutor has complete power to designate any nominee he chooses, without court order, to engage in the collection of the judgment. Under the terms agreed upon between the parties the Special Prosecuto's nominee, whoever he may be, has the power to liquidate, sell and dispose of all the property, real or personal, wherever situated, covered in the general assignment, to provide funds to satisfy the defendants' obligation to pay the amount of the judgment of the judgment-creditor, ...